Two houses, same lot

[Le Poisson]

I've found a weirdish property and wonder if its worth pursuing...

The property is in a mid-sized town in Southern Ontario, listed for around $150K. Property is zoned R4-multi family and has 2 single family homes on it with distinct addresses. When I spoke with the planner, he was baffled as to how this came to be. The lot zoning allows for a fourplex, but the lot size is only large enough for a triplex. The zoning does not allow for two houses, only a single, multifamily structure. Make sense?

Currently one house on the lot is rented for over $1,000/mo. The second is vacant and needs renos. I suspect drywall and paint, but who knows. Taxes are $1500/yr. Tenants pay own utilities.

My concerns with the property are:

• - What would financing look like on this? Would a bank even touch it?
• - A similar "carriage house fire" in the town where I grew up saw a landlord in hot water when hoses from the fire dept couldn't reach the back lot house. What liabilities would I be taking on here?
• - should I be concerned with the zoning implications? The zoning bylaws back as far as 1960 show both houses on the lot, so I suspect it is unlikely I would be ordered to remove one, but could that happen??

Anoyone else bought a place like this? How did it go? Would building a "Breezeway", car port, or similar structure between the houses end-run the multiple structures issue?

[iris lily]

We actually own a parcel in the city of st louis that has two small houses on it, each with a separate address. They sit back to back and face different streets.


. We paid cash so I have no info about the mortgage. The one thing I was concerned about in buying it is that the ownership documents (deed, etc.) really reflect both addresses.

We have many many carriage house properties in my city as well as several properties in the historic districts that have quaint small houses behind the bigger house.here, carriage house quarters encompass a garage with living quarters  above.


While it is unlikely we will ever live in these properties because the neighborhood is crap, I love the potential. I would like to,live in one house while DH lives in the other. We could have a big garden because it has an extra lot.we could have a total of 8 pets on the property, double the number allowed by the city for our current abode which is defined "per house structure."

[bpleshek]

I decided to not buy a property because a house was subdivided into a duplex and apparently you can sell that house separately from the other half.  They were deeded separately.  Since they shared the same roof and other things, it seemed a bad deal because I wouldn't want to have to deal with another owner and shared expenses(like the aforementioned roof which was in need of replacing).  It was just too weird for me.

@Prospector:

Are they going to make you take down one of the structures for being an improperly zoned non-permitted structure?  Might they rezone it into two lots?  I'd want to talk with someone down at the city office before I would consider it.  Do they share a common driveway or other easement?

Brian

[iris lily]

It is very unusual for "them" to force tear downs. Even if these porperties would not be allowed under current zoning laws, existing properties are grandfathered in under chamges.That is the norm, anyway.

Edited to add:

Woops. If this second house was built illegally that is worth exploring before buying the property.

What is age of these houses? the fact that the zoning guy cant explain it would worry me.

[totoro]

This is probably a good property to buy if the use is grandfathered which it likely is if there are two legal addresses.  Just check with the regional district - they'll have the past plans and permits.  In BC this information is freely available.  Plus you can get a land titles search.  Usually the income produced by such a property exceeds a SFH.  I'm surprised at how cheap it is vs. the rent potential.

[Le Poisson]

Hurdles, hurdles, hurdles...

I wasn't aware of this, but apparently lenders will only assign a value to the main house in a situation where two habitable dwellings share a lot. This means that to get financing, you need to go in with enough cash to pay for the second house yourself, then get a mortgage on the 'main' dwelling.

This is interesting. The seller has entertained 3 offers on this lot so far, and all have unravelled due to complications with financing. I wonder if the numbers would still work on it with private lending.

[K-ice]

Very interesting. Would title insurance help in any way?

I don't know much about it except a woman that bought a commercial place that want's actually zoned commercial (she found out after). I forget all the details but the insurance did come to bat for her and help get it rezoned.

[totoro]

I'd try a different bank if the second structure is legal.

[Le Poisson]

Cross posted from the boring money journal...

Investment property hunting...

Took a long drive after work today to look at a "too-good-to-be-true" deal. Turns out it was too good to be true. Oh well it was a nice night out.

The property was a pair of houses on a large lot. The lot was on the crest of a large bank which dropped down in to the downtown area. Asking price was $158,000 with one unit rented at $1050, and the other vacant. With $$$ in my eyes I made the hour long drive and did the walkthrough.

House 1. - Vacant

- former drug house. Upstairs bedroom set up as shop with different signs taped to the wall and descriptions of what each variety of goods was like. Not being part of drug culture I found this interesting and educational. Some of the buds looked very unique.
- Bad lean toward the hill. The house was on the brink of the slope and the lean hinted that soils are pushing it downhill.
- Main floor floors were spongy. You could feel them sag as you walked on them. The walls all needed patching from where someone had punched through them. Many broken windows. Bashed in appliances.
- Wraparound porch completely rotted out. needed rebuilding all the way around the house.
- Cast iron plumbing, 100 AMP hydro, no basement access (dirt crawlspace according to LA). Chimney cracked and hanging off itself - looked like it was about to fall off.

House 2. - Tenanted

- Exterior in much better condition. Vinyl siding needed a powerwash, gutters needed cleaning, but overall workable. Many broken disability scooters scattered around yard.
- Tenant came out on porch, saw us outside, turned around and ran inside. Looks like Grizzly Adams. Weird.
- Inside covered in a thick layer of cigarette tar. Tenants both over weight. Female tells us they are on Disability because neither of them can walk. Have teenage kids.
- Rooms filled with detrius to the point doors won't open. Appliances caked in filth.
- Tenant proudly tells us then have never had pets and never plan to. Fishtank says this is a lie. Water in fish tank is brown, but there are still air bubbles, so I assume there were fish too. Wife sits on walker and shares her life history as we tour the house.
- Greeted by rat in bathroom... Shower is... *Shudder*  The bathroom has its own ecosystem.
- These people have children, that meant that at some time they were naked in this house. GAAAAK!!!

Lot
- Property is largish and in a very affluent neighbourhood, so maybe lot value???
- Retaining wall at top of bank is RR ties, and very rotten. Height of about 5'. No idea of replacement budget, but its big.
- Zoning difficulties - Lot is zoned R4 with an EP hold on the bank. Buildable land reduces potential to an R2. You pay the taxes on a large lot, but only get to use a corner of it.

So yeah, yet another house I won't be buying. I mean the numbers worked on this, but between the quality of the tenants and the quality of the structures, and the poor land, I just can't see owning it. You would have to tear down and rebuild the front house, then wait for the tenants to move out and gut/reno the back house. And do all that without disturbing the soils or the retaining wall will fail taking the houses with it.

Run AWAY!!!